In short
CPC/NOAA puts the odds of El Niño at 61% for May–July 2026, and Columbia University's IRI at 70% for April–June. Its strength is still uncertain.
For rice, El Niño tends to bring drought and heat to Southeast Asia and India, which accounts for about 40% of world exports, and excess rain to southern Brazil.
Global stocks of 192.3 million tonnes in 2025-26, according to the USDA, cushion the impact, but export restrictions in Asia can open windows for Mercosur rice.
For two years, the global rice market ran under the sign of abundance. Record crops, the return of Asian exports after government restrictions and historically high stocks combined to push prices down and ease inflation pressures around the world. But the cycle is turning, and anyone working in the rice market should already have noticed.
La Niña is over. The equatorial Pacific has moved into neutral conditions, and the latest projections from the US Climate Prediction Center (CPC/NOAA) give a 61% chance that El Niño will emerge in the May–July 2026 quarter, persisting at least until the end of the year. The models of Columbia University's International Research Institute for Climate and Society (IRI) are firmer: they give a 70% chance that El Niño develops in April–June 2026, and that it dominates the rest of the year with probabilities between 88% and 94%.
What is not yet settled is the strength. Possible outcomes range from ENSO-neutral to a very strong El Niño during the northern hemisphere winter, with roughly a 1-in-4 chance of a very strong event (Niño-3.4 anomaly above +2.0 °C), depending on whether wind anomalies in the Pacific persist through the boreal summer, which is not guaranteed.
For the rice market, this uncertainty is no reason for indifference. It is exactly the kind of window in which acting early makes the difference.
What El Niño means for rice
El Niño and La Niña are opposite phases of the same tropical Pacific climate system. While La Niña cools equatorial waters and tends to strengthen the monsoons in Southeast Asia, El Niño warms the ocean surface and has the opposite effect: hotter, drier conditions in the world's main rice-growing region, and excess rain in southern South America.
Past episodes outline the range of possible impacts. The strong 2015-2016 event caused severe drought in Australia and Southeast Asia, weakened the Indian monsoon and cut grain output in the region. A moderate episode, such as 2009-2010, brought dry weather that hurt rice crops in India and Southeast Asia. Historical analogy is not a forecast, but it gives a concrete reference for what is at stake if the phenomenon is confirmed and strengthens.
Asia under pressure: drought, monsoon and rising costs
Southeast Asia is where the climate signal turns most directly into production risk. In El Niño years the region tends to face drier, hotter conditions, weaker monsoons and more frequent heat waves, a pattern that directly affects countries such as Indonesia, Vietnam, Thailand and the Philippines, which account for a large share of world rice exports and consumption.
India deserves special attention. The world's largest exporter, with a share the USDA estimates at around 40% of global exports in recent years, the country faces the prospect of a below-average monsoon for the first time in three years, with some scenarios projecting rainfall at 70% to 90% of the historical average, with a potential direct impact on summer crops, rice among them.
Among importers, the margin is also narrowing. The Philippines and Indonesia, which rely on imports to supplement their production, will have less room to manoeuvre if El Niño cuts local output and the main exporters, under pressure at the same time, choose to protect their national stocks. Most Asian producers grow two or three rice crops a year, which means a climate event that hits the main June–July planting echoes through the whole annual cycle.
Add to this a geopolitical factor worth watching: the conflict in Iran raises uncertainty over fuel and fertiliser supply through the Strait of Hormuz, a critical route for Asian markets. How far this logistics impact actually reaches input flows depends on how the conflict evolves, but it is already showing in the behaviour of farmers in the region. FAO chief economist Máximo Torero summed it up: "Farmers have already started planting rice in some countries and are using fewer inputs because prices have gone up. We will see a tighter global supply in the second half of the year and early next year."
Brazil: too much water in the south, opportunity abroad
For Brazil, El Niño works on two fronts with opposite signs.
In the south of the country, where national rice production is concentrated, the phenomenon tends to intensify rainfall. For irrigated rice in the lowlands of Rio Grande do Sul, this is not necessarily an advantage: the risk of planting delays and flooding is real, while sowing may find short windows and waterlogged soils. Rio Grande do Sul, still absorbing the structural impacts of the 2024 floods, enters this cycle with drainage infrastructure more fragile than usual.
On the other hand, the same dynamics that squeeze Asian supply open windows of competitiveness for Mercosur. When India, Thailand and Vietnam face smaller crops and turn to export restrictions to protect their domestic markets, a recurring strategy in these cycles, buyers in sub-Saharan Africa, the Middle East and Asia itself look for alternatives. The Southern Cone is one of them. For producers and exporters in the region, the scenario calls for a two-sided reading: protect the crop from excess water in the south and position strategically to benefit from shrinking Asian supply in international markets.
Stocks as a buffer, and their limits
The main difference between the 2026-27 cycle and older El Niño episodes is the large volume of accumulated global stocks. According to the Rice Outlook from the USDA, April 2026, global ending rice stocks for 2025-26 are projected at 192.3 million tonnes. China and India together hold most of that total (China about 55% and India roughly 25%), largely through government storage programmes.
This cushion matters, and it explains why the market has not yet urgently priced in the climate risk that is forming. But government stocks have a well-known structural limit: when El Niño hits consecutive crops or becomes unexpectedly strong, the countries holding those volumes use them first to protect their own population, and they restrict exports. That is what India did in 2023, and the pattern repeats to varying degrees in every supply-pressure cycle. Thailand, Vietnam and India have each signalled, at different times, temporary rice export restrictions to secure domestic stocks, a strategy that historically amplifies price volatility just when the market most needs stability.
The price cycle and the window that opens
The price context leading into this cycle is key to understanding what is at stake. Throughout 2025, rice prices fell sharply in the main markets, a direct result of Asian supply recovering after India's export restrictions. In Brazil, prices dropped hard and reached levels that hurt producers' profitability in several regions.
This scenario of surplus and downward pressure may be ending. Industry analyses indicate that a mild El Niño may cause limited production disruption, but a stronger, longer event could cut output of climate-sensitive crops in Southeast Asia by 5% to 12%. For a market that relies on Asia for about 90% of its production, those percentages quickly translate into price pressure. Camil's CEO, Luciano Quartiero, has already warned that El Niño may delay planting of the next crop and restrict supply.
Climate data as an operating advantage
Turning climate from a background variable into an intelligence asset is what sets modern risk management in grain markets apart. ENSO cycles can be anticipated months ahead, not with certainty, but with growing probability as ocean signals firm up. Those who build this reading into their decisions operate with a time advantage the market has not yet fully priced in.
The key point is not to claim that the 2026-27 El Niño will be catastrophic: the projections do not support that conclusion. The point is that the probability of a significant event is high enough to justify active monitoring and a review of buying, hedging and contract positioning strategies before the risk is fully priced in.
The rice market does not forgive those who treat climate as a surprise.
Want to position yourself for this cycle? Talk to Corretora Forgiarini: we broker the purchase and sale of paddy rice and type 1 milled rice in Paraguay, Brazil, Argentina and in rice export and import.
Frequently asked questions about El Niño and rice
Will there be an El Niño in 2026?
Projections point to a high probability: CPC/NOAA estimates a 61% chance of El Niño in May–July 2026, and Columbia University's IRI 70% in April–June. Its strength is still uncertain, with about a 1-in-4 chance of a very strong event.
How does El Niño affect rice production?
In Asia, it tends to bring hotter, drier weather and weaken the monsoons, including in India, which reduces output in the world's main producing region. In southern Brazil the effect is the opposite: more rain, with the risk of planting delays and flooding in the lowlands.
Can El Niño push rice prices up?
Yes. A strong, prolonged event can cut output of climate-sensitive crops in Southeast Asia by 5% to 12%, and exporting countries often restrict sales to protect their domestic market. Global stocks, estimated by the USDA at 192.3 million tonnes, cushion part of that effect.
What does El Niño change for Mercosur rice?
In the field, it raises the risk of excess rain in southern Brazil. In the market, smaller Asian supply can open room for Mercosur rice in sub-Saharan Africa, the Middle East and Asia itself.
References
NOAA – CPC/Climate Prediction Center. ENSO Diagnostic Discussion – Final La Niña Advisory / El Niño Watch. 9 Apr. 2026. Available at: https://www.cpc.ncep.noaa.gov/products/analysis_monitoring/enso_advisory/ensodisc.pdf
IRI – International Research Institute for Climate and Society / Columbia University. April 2026 Quick Look – ENSO Forecast. Mid-Apr. 2026. Available at: https://iri.columbia.edu/our-expertise/climate/forecasts/enso/current/
INMET – Instituto Nacional de Meteorologia (Brazil). El Niño em 2026? Nota técnica sobre impactos na agricultura brasileira. Mar. 2026 (in Portuguese). Available at: https://portal.inmet.gov.br
USDA – Economic Research Service. Rice Outlook: April 2026 (RCS-26C). 13 Apr. 2026. Available at: https://ers.usda.gov
FAO – Food and Agriculture Organization of the United Nations. Statement by Máximo Torero, chief economist. Reported by international news agencies. May 2026. Available at: https://www.fao.org
Agrolink. El Niño 2026/2027 se forma no Pacífico: produtor do Sul precisa começar a se preparar agora. May 2026 (in Portuguese). Available at: https://www.agrolink.com.br
Conexão Safra. El Niño de 2026/2027 pode repetir a força e os impactos do fenômeno de 2015/2016? Apr. 2026 (in Portuguese). Available at: https://conexaosafra.com
CNN Brasil / Meteomatics. El Niño mais forte em uma década ameaça colheitas globais. Apr. 2026 (in Portuguese). Available at: https://www.cnnbrasil.com.br
Público (Portugal). Como é que o El Niño pode afectar o tempo em todo o mundo em 2026 e 2027? Apr. 2026 (in Portuguese). Available at: https://www.publico.pt
The AgriBiz. O arroz pode ficar mais caro em 2026. A culpa é do El Niño. May 2026 (in Portuguese). Available at: https://www.theagribiz.com